Copyright© 2017 Santen Pharmaceutical Co., Ltd. All rights reserved.

Investor Meeting on

Q1 FY2017 Results

August 1, 2017

Kazuo Koshiji

Senior Corporate Officer

Chief Financial Officer (CFO)

Head of Finance Division

Santen’s Values

By focusing on ophthalmology, Santen develops unique

scientific knowledge and organizational capabilities that

contribute to the well-being of patients, their loved ones

and consequently to society.

1

2

To Become a Specialized Pharmaceutical Company

with a Global Presence

Rank #5 globally

Overseas sales:

16% of total sales

Overseas sales:

30％ of total sales

-Strengthen Japan business

-Completed preparation for business expansion in Asia/EMEA

Plan Results

Product

Development

-Transform product development to realize enhanced productivity and achieve sustained growth

-Active investment in sustainable growth

-Approval, Launch: Tapcom, Ikervis -Development: progress of DE-109, 117, 122 -Licensing, Acquisition: DE-126, 128

Business

Expansion

-Grow business in Asia/EMEA and strengthen market presence by entering into new markets

-Raised new products sales ratio in Japan: from 44% (FY13) to 71% (FY16) -Growth in market share of OTC products in Japan -Strengthened internal sales platform in Asian countries -Grew the number EMEA countries with sales

Organization

and Talent

-Develop talent and organization to realize sustained growth and strengthen the global management system

-Introduced new HR appraisal system -Held training aimed at nurturing the next generation of

employees / managers

2014~2017 2020 ~2013

Current Mid-Term Plan (MTP)

-Grow business in Asia/EMEA and improve profitability

-Prepare for business expansion to the U.S. and other regions

“To Become a Specialized Pharmaceutical Company with a Global Presence”

Become Global Top 3

Overseas sales:

40~50％ of total sales

3 3

Q1 FY2017 Financial Results

ended June 30, 2017

4

Q1 FY2017 Financial Highlights Double-digit growth in revenue and profit

Higher revenue and profit as revenue growth both in Japan and overseas more than offset higher SG&A and R&D expenses

◆Revenue: 55.9 bil yen, up 11.9% (YoY)

・Japan pharma 34.8 bil yen (+5.4%), OTC 4.0 bil yen (+35.3%)

・Asia 7.3 bil yen (+21.4%), EMEA 8.7 bil yen (+29.1%)

◆Operating profit: Core basis 13.7 bil yen, up 10.9% (YoY); IFRS 12.1 bil yen, up 11.5% (YoY)

(JPY billions) FY2016

Q1 Q1 Full year

Core basis actual actual forecast

Revenue 50.0 55.9 11.9% 218.0 25.7%

COGS -18.4 -21.6 17.3% -81.0 26.6%

Gross margin 31.6 34.4 8.7% 137.0 25.1%

SGA -14.1 -15.1 6.8% -68.0 22.1%

R&D expenses -5.2 -5.6 8.8% -25.0 22.5%

OP 12.4 13.7 10.9% 44.0 31.1%

Net profit 8.8 10.0 14.0% 31.2 32.0%

IFRS

OP 10.8 12.1 11.5% 37.4 32.2%

Net profit 7.3 8.9 21.7% 26.8 33.3%

USD 108.83 111.33 -2.3% 110.00 -1.2%

EUR 122.53 122.95 -0.3% 120.00 -2.5%

CNY 16.63 16.22 2.5% 16.50 1.7%

+: JPY appreciation, -: JPY depreciation

FY2017

YoY

vs FY

forecast

5

Q1

FY2017

55.9

Other

0.0

NPM*

0.2

（EMEA

currency impact）

0.0

EMEA

1.9

(Asia

currency

impact)

0.0

Asia

1.3

Surgical

0.0

OTC

1.0

Japan

Pharma

1.8

Q1

FY2016

50.0

Japan Overseas

Japan business Overseas business

Japan pharma

Revenue growth of new products,

mainly Eylea, Alesion, Diquas, helped

boost overall revenue +5.4%

Asia

Overall growth of 21.4% (JPY base) due to continuous

growth in China and S. Korea, and significant progress

in ASEAN market (+75.9%, JPY base)

OTC

In addition to inbound sales, good

progress in new products and sales

promotion for Japanese consumers

added to +35.3% revenue growth

EMEA Growth of acquired MSD products and Ikervis helped

boost revenue +29.1% (JPY base)

Surgical +4.7% growth supported by sales

collaborations with pharma business NPM No NPM from MSD with completion of MA transfers

33.0 2.9 0.7

↓ ↓ ↓

34.8 4.0 0.8

6.0

↓

7.3

6.7

↓

8.7

0.2 0.4

↓ ↓

0.0 0.4

* Net profit margin (NPM) relating to the US-based MSD product acquisition.

(JPY billions)

Q1 FY16 Q1 FY17

USD JPY 108.83 JPY 111.33

EUR JPY 122.53 JPY 122.95

CNY JPY 16.63 JPY 16.22

Q1 FY2017 Revenue All businesses contributing to higher growth

6

Q1

FY2017

13.7

Other

0.5

R&D

0.5

HQ

SGA

0.1

NPM

0.2

(US

currency

impact)

0.0

US

0.6

(EMEA

currency

impact)

0.0

EMEA

1.6

(Asia

currency

impact)

0.0

Asia

1.0

Surgical

0.1

OTC

0.4

Japan

Pharma

0.6

Q1

FY2016

12.4

Japan Overseas HQ

Japan business Overseas business

Japan pharma Decline reflects transitory factor that lowered COGS in same period of prior year

Asia Overall higher with revenue growth and expense management

OTC Overall higher with revenue growth EMEA

R&D expenses

Higher expenses due to pipeline progress (DE-117, 122, 126, 128)

US Preparation expenses for US entry increased

16.6 1.4 0.2

↓ ↓ ↓

16.0 1.8 0.1

1.3

↓

2.3

0.5

↓

2.0

-0.6

↓

-1.2

0.2 -2.4 -5.2 0.3

↓ ↓ ↓ ↓

0.0 -2.5 -5.6 0.8

(JPY billions)

Q1 FY16 Q1 FY17

USD JPY 108.83 JPY 111.33

EUR JPY 122.53 JPY 122.95

CNY JPY 16.63 JPY 16.22

Q1 FY2017 Core Operating Profit High contributions from overseas operations

7

Performance by Business (Japan)

Q1

FY14

31.7

24.3

Q1

FY15

+7%

33.0

Q1

FY16

34.8

Q1

FY17

Q1

FY13

26.3

15.9

12.5

10.6

16.0

+6%

16.6

2.4 2.9

Q1

FY14

Q1

FY13

Q1

FY15

1.4

4.0 +26%

Q1

FY16

Q1

FY17

1.6

1.8 1.4

+54%

0.3 0.4

1.1

Q1

FY16

0.7

+5%

Q1

FY17

0.8

Q1

FY14

0.7

Q1

FY15

0.7

Q1

FY13

0.6

0.1 0.2

-0.2

0.3

+1%

0.1

(JPY billions, CAGR%) 【Japan pharma】 【OTC】 【Surgical】

Increase in revenue on sales of new products, such as Eylea; Removing transitory factor in Q1 FY16, Q1 FY17 OP increased YoY; Going forward in FY17 efforts being made to increase profit through sales from higher margin products like Alesion

In addition to FX (inbound sales

and domestic promotion),

Beauteye (inbound sales), good

progress in new products

launched in prior autumn

Sales

OP

before R&D

8

+25%

Q1

FY17

7.3

Q1

FY16

6.0

Q1

FY13

3.0

Q1

FY15

6.3

Q1

FY14

3.8

2.3

1.3

2.2

1.0

0.5

+46%

6.0

Q1

FY15

5.4

Q1

FY14

3.7

Q1

FY13

3.3

+22%

Q1

FY17

7.3

Q1

FY16

1.3

2.3

1.9

1.0

0.6

+43%

Good market penetration of Santen products particularly in

China, S. Korea and Vietnam and other countries;

Business platform enhancements proceeding well – striving

for continuous growth with gross margin improvement

exceeding additional investments

Performance by Business (Asia)

Sales

OP

before R&D

Local currency base

（Conversion with FY2017 forecast rate for all FY）

(JPY billions, CAGR%)

9

Q1

FY2013

2.9

+31%

Q1

FY2017

8.7

Q1

FY2016

6.7

Q1

FY2015

5.4

Q1

FY2014

3.3

+67% 2.0

0.5

-0.4

0.0 0.3

70.6

54.9

40.1

23.222.8

+33%

Q1

FY2017

Q1

FY2016

Q1

FY2015

Q1

FY2014

Q1

FY2013

16.5

3.9

-3.0

0.32.0

+70%

Continuous good market penetration of both Santen and MSD

products in glaucoma area (YoY: Cosopt +7.7%, Tapros +20.6%,

Trusopt +12.4%);

Ikervis growth (YoY: +190.9%) above expectation at start of FY17

Performance by Business (EMEA)

Sales

OP

before R&D

Local currency (EUR millions) (JPY billions, CAGR%)

10

FY2017 P&L Forecast (No change from May 10)

Revenue: Growth forecast in all businesses, particularly overseas

Operating profit: Increased spending on future growth (listed below), while also strengthening cost control systems. OP is forecast to increase. ・ Investments in pipeline progress and the maximization of product value ・ Investments in US entry preparation

Core basis

IFRS Amortization on intangible assets associated with products will change substantially; non-recurring items; revenue and core operating profit to grow in proportion

(JPY billions) FY2016

Core basis

Revenue 199.1 218.0 9.5%

COGS -75.0 -81.0 8.1%

SGA -61.7 -68.0 10.3%

R&D expenses -22.8 -25.0 9.7%

Operating profit 39.7 44.0 10.9%

Net profit 28.7 31.2 8.8%

ROE 11.2% 12.3% 1.1pt

IFRS

Operating profit 32.5 37.4 15.2%

Net profit 23.1 26.8 16.2%

ROE 9.0% 10.6% 1.6pt

USD 108.64 110.00

EUR 118.96 120.00

CNY 16.14 16.50

FY2017

Actual Forecast YoY

Payout-ratio (%)

39.3% 46.3%

19.4%

37.8%

41.9%

51.1%

50.8%

36.0%

36.3%

67.2% 54.7%

42.9%

39.9%

39.7%

55.8%

21.4%

810

12 13

16 16 1618

20 20 2022

25 26 26

4

FY17Fct

-

39.3%

FY16

12.3

100.2%

FY15

-

19.4%

FY14

-

37.8%

FY13

-

41.9%

FY12

13.7

134.4%

FY11

-

50.8%

FY10

-

36.0%

FY09

-

36.3%

FY08

-

67.2%

FY07

4.8

92.3%

FY06

-

42.9%

FY05

-

39.9%

FY04

2.6

62.8%

FY03

-

55.8%

FY02

3.2

59.1%

11

FY2017 Dividends Forecast (No change from May 10)

* The company implemented a 5-for-1 stock split on April 1, 2015. Accordingly, the calculations of annual dividend per share have been adjusted in all periods

for comparison purposes.

** J-GAAP standards used until FY13, IFRS applied from FY14.

Share buyback (b yen) Total return

FY2014-FY2017 Shareholder Return Policy • Stable and sustained return to shareholders

• Maintain a sound and flexible financial position to enable product acquisitions and M&A for future growth

• Consider share buybacks in a flexible manner

• Aim to maintain a dividend payout ratio of about 40%

Removing anti-RA transfer impact, FY15 payout ratio estimated at 35%

Annual dividend per share (JPY)

Annual Dividends

FY2016:

JPY26 / share

FY2017 (forecast):

JPY26 / share

12 12

Reference

13

Q1 FY2017 Profit / Loss

・OTC +0.3 bil yen,

・Asia +0.3 bil yen, EMEA -0.1 bil yen, US +0.6 bil yen

・HQ admin +0.1 bil yen

・Decreased actual tax ratio due to increase of profit before tax and tax incentive on R&D expenses at HQ

Q1 FY16 Q1 FY17

USD JPY 108.83 JPY 111.33

EUR JPY 122.53 JPY 122.95

CNY JPY 16.63 JPY 16.22

Q1 FY16 Q1 FY17

(JPY billions)

Revenue 50.0 55.9 11.9%

COGS -18.4 -36.8% -21.6 -38.6% 17.3%

SGA expenses -14.1 -28.2% -15.1 -26.9% 6.8%

R&D expenses -5.2 -10.3% -5.6 -10.0% 8.8%

Amortization on intangible

assets assosiated with

products

-1.6 -3.2% -1.7 -3.0% 4.4%

Other income 0.1 0.2% 0.1 0.1% -24.8%

Other expenses -0.1 -0.1% -0.1 -0.1% 4.3%

Operating profit (IFRS) 10.8 21.6% 12.1 21.5% 11.5%

Finance income 0.4 0.9% 0.5 0.8% 5.6%

Finance expenses -1.0 -2.0% -0.3 -0.5% -69.8%

Profit before tax 10.3 20.5% 12.2 21.8% 19.1%

Income tax expenses -2.9 -5.9% -3.3 -5.9% 12.4%

Actual tax ratio 28.6% 27.0% -1.6pt

Net profit (IFRS) 7.3 14.6% 8.9 15.9% 21.7%

Core operating profit 12.4 24.7% 13.7 24.5% 10.9%

Core net profit 8.8 17.5% 10.0 17.9% 14.0%

YoYActualvs

RevenueActual

vs

Revenue

14

Q1 FY2017 Financial Position

109.8

64.9

102.0

325.6

50.3

14.7

260.6 (80%)

325.6

49.0

322.8

53.4

15.5

253.9 (79%)

322.8

53.3

103.7

63.0

102.8

※

March 31, 2017

Intangible assets

Other non-

current assets

Current assets

Cash and cash

equivalents

Equity

Non-current

liabilities

※ Current liability

June 30, 2017

Increase of trade receivables due to cash receipt timing, and decrease of cash due to tax and dividend payments

63.0

53.3 53.4

Non-current assets

165.8

Current assets

157.0

Non-current assets

166.8

Current assets

158.7

(JPY billions)

March 31,

2017

June 30,

2017Change

Non-current assets 165.8 166.8 1.1

Property, plant and equipment 28.6 28.6 0.1

Intangible assets 102.8 102.0 -0.8

Financial assets 29.9 31.8 1.9

Other 4.5 4.5 -0.1

Current assets 157.0 158.8 1.7

Inventories 28.5 27.0 -1.5

Trade and other receivables 71.0 77.1 6.1

Cash and cash equivalents 53.3 49.0 -4.3

Other 4.2 5.7 -1.4

Non-current liabilities 15.5 14.7 -0.8

Financial liabilities 7.6 6.1 -1.5

Deferred tax liabilities 2.6 3.6 1.0

Other 5.3 4.9 -0.3

Current liabilities 53.4 50.3 -3.1

Trade and other liabilities 23.9 23.7 -0.2

Other financial liabilities 17.6 14.7 -2.9

Income tax payable 3.3 3.2 0.0

Other 8.6 8.6 0.0

Equity 253.9 260.6 6.8

15

Q1 FY2017 Segment Revenue

Q1 FY17　Segment Revenue

(JPY billions) YoY YoY YoY

Pharamaceuticals 39.0 7.8% 16.3 24.0% 55.2 12.1%

Prescription 35.0 5.5% 16.2 23.8% 51.2 10.7%

Ophthalmic 34.9 5.5% 16.1 26.8% 50.9 11.4%

Others 0.2 16.2% 0.1 -64.9% 0.3 -44.2%

OTC 3.9 33.1% 0.1 154.1% 4.0 34.1%

Others 0.7 1.5% 0.0 -76.3% 0.7 -2.7%

Medical devices 0.6 -1.7% 0.0 -13.4% 0.6 -1.8%

Others 0.1 22.1% 0.0 -86.8% 0.1 -6.8%

Total 39.7 7.7% 16.3 23.7% 55.9 11.9%

Sales ratio 70.9% 29.1%

Revenue Revenue Revenue

TotalJapan Overseas

16

Capital Expenditures/Depreciation & Amortization

* Excludes amortization on intangible assets associated with products and long-term prepaid expenses

Q1 Full year Full year

Actual Actual Actual YoY Forecast

1.6 5.2 1.0 -37.6% 7.7

0.8 3.5 1.0 24.8% 3.8

1.6 6.4 1.7 4.4% 6.6

Intangible assets

-Merck products1.3 5.4 1.4 4.7% 5.6

Intangible assets

-Ikervis0.2 0.7 0.2 0.0% 0.7

Amortization on intangible assets

associated with products

FY2017FY2016

Q1（JPY billions）

Capital expenditures

Depreciation and amortization*

Market Overview of Prescription Ophthalmic

in Japan

Source: Copyright © 2017 QuintilesIMS. IMS-JPM 2016-17 Santen analysis based on IMS data. Reprinted with permission

JPY billions ValueChange

(YoY)Value

Change

(YoY)Value

Change

(YoY)Value

Change

(YoY)

Total 38.9 6.7% 86.6 1.2% 44.9% #1 41.4 6.5% 90.4 4.3% 45.8% #1

Anti-glaucoma 9.4 2.6% 29.2 4.0% 32.3% #1 9.2 -2.2% 29.3 0.5% 31.4% #1

Anti-VEGF 13.2 22.4% 18.5 -1.3% 71.2% #1 15.1 14.6% 21.1 14.1% 71.5% #1

Corneal/dry eye 7.1 -2.6% 11.4 -0.8% 62.8% #1 7.3 3.0% 11.8 3.5% 62.5% #1

Anti-allergy 3.4 26.6% 8.2 14.5% 41.8% #1 4.1 20.9% 8.9 8.8% 46.4% #1

Anti-infection 1.8 -19.4% 3.9 -9.6% 45.5% #1 1.5 -13.0% 3.7 -4.2% 41.3% #1

ValueChange

(YoY)Value

Change

(YoY)

Total 159.8 3.0% 349.3 0.2% 45.8% #1

Anti-glaucoma 36.6 -1.1% 114.5 0.6% 31.9% #1

Anti-VEGF 55.9 8.8% 77.1 3.8% 72.5% #1

Corneal/dry eye 28.7 -1.6% 45.9 -0.8% 62.6% #1

Anti-allergy 16.9 23.5% 38.5 4.5% 44.0% #1

Anti-infection 6.2 -20.2% 14.4 -9.9% 43.0% #1

Jul 1, 2016 - Jun 30, 2017

Q1FY16 Q1FY17

Santen MarketSanten

share

Santen MarketSanten

share

Santen MarketSanten

share

17

Status of Research & Development Q1 FY2017

Senior Corporate Officer

Chief Scientific Officer (CSO)

Head of Global Research & Development

Naveed Shams, M.D., Ph.D.

19

Future Development and Regulatory Milestones

DE-117 P2b/3 Glaucoma/

ocular

hypertension Japan: Q2/Q3 FY17 filing

DE-126 P2b Glaucoma/

ocular

hypertension US/Japan: Jan~Jun 2018 P2b completion

DE-128 (MicroShunt)

P2/3 Glaucoma/

ocular

hypertension

US: calendar 2018~2019 P2/3 completion,

calendar 2020~2021 launch

DE-109 (IVT sirolimus)

Filing

Accepted Uveitis

US: Dec 24, 2017 PDUFA date;

Jan~Jun 2018 launch

P3 EU: 2nd half of FY17 re-filing

DE-122 P2a Wet AMD US: Jan~Jun 2019 P2a completion**,

FY17 P1/2 completion

Development region: milestone* Development

status*

As of August 1, 2017

*Updated information is underlined, **Conducting in the Philippines

Indication

Vekacia (Verkazia): In July 2017 EMA’s CHMP adopted positive opinion recommending

marketing authorization

20 20

Reference

DE-117 EP2 receptor agonist

US

JP P2b/3 on-going

Asia P3 on-going

DE-126 FP/EP3 dual receptor agonist

US Started P2b in Jul 2017

JP

DE-128 InnFocus MicroShunt

US P2/3 on-going

Europe CE mark granted

21

Pipeline / Product Development Status (1)

See Santen Consolidate Results for the 1st Quarter Fiscal 2017 for more details. “Asia” above excludes Japan and China.

Glaucoma/ ocular hypertension P1 P2 P3

Reg review

Launch Current status or updated information

P2b

P2b/3

P2/3

As of August 1, 2017

P2b

22

Pipeline / Product Development Status (2)

DE-109

IVT sirolimus

US Filed in Feb 2017

JP

Europe Preparing to re-file

Asia Filed in Apr 2015

DE-122 Anti-endoglin antibody

US Started P2a in Jul 2017

Retinal/ uveal disease

P2a

As of August 1, 2017

P1 P2 P3 Reg

review Launch Current status or updated information

See Santen Consolidate Results for the 1st Quarter Fiscal 2017 for more details. “Asia” above excludes Japan and China.

DE-089 Diquas

CN Filed in Jan 2012

DE-114A Epinastine HCl (high dose)

JP Started P3 in May 2017

Cyclokat Ikervis/ciclosporin

US

Asia Approved since Nov 2016

Others Filed in Canada in Apr 2016

Vekacia Verkazia/ciclosporin

Europe Filed and granted Priority Review status in

Dec 2016 and received positive CHMP

opinion in Jul 2017

Kerato- conjunctival disease P1 P2 P3

Reg review

Launch Current status or updated information

23

Forward-Looking Statements

Information given in this presentation contains certain forward-looking statements concerning forecasts, projections and plans whose realization is subject to risk and uncertainty from a variety of sources. Actual results may differ significantly from forecasts.

Business performance and financial condition are subject to the effects of medical regulatory changes made by the governments of Japan and other nations concerning medical insurance, drug pricing and other systems, and to fluctuations in market variables such as interest rates and foreign exchange rates.

The process of drug research and development from discovery to final approval and sales is long, complex and uncertain. Individual compounds are subject to a multitude of uncertainties, including the termination of clinical development at various stages and the non-approval of products after a regulatory filing has been submitted. Forecasts and projections concerning new products take into account assumptions concerning the development pipelines of other companies and any co-promotion agreements, existing or planned. The success or failure of such agreements could affect business performance and financial condition significantly.

Business performance and financial conditions could be affected significantly by a substantial drop in sales of a major drug, either currently marketed or expected to be launched, due to termination of sales as a result of factors such as patent expiry and complications, product defects or unforeseen side effects. Santen Pharmaceutical also sells numerous products under sales and/or manufacturing license from other companies. Business performance could be affected significantly by changes in the terms and conditions of agreements and/or the non-renewal of agreements.

Santen Pharmaceutical is reliant on specific companies for supplies of certain raw materials used in production. Business performance could be affected significantly by the suspension or termination of supplies of such raw materials if such and event were to adversely affect supply capabilities for related final products.